Global Daily Tax News, Mauritius Announces Company Tax Hikes In New Budget, (Jun 11, 2025)
Mauritius has announced plans to significantly simplify the personal income tax regime and introduce a corporate alternative minimum tax (AMT) and a domestic minimum top-up tax on large multinational enterprises.
In the area of personal income tax, the current 11-band personal income tax regime will be replaced with a two-tier regime, with a sizeable increase to the personal income tax-free allowance from MUR390,000 (USD8,500) to MUR500,000. A 10-percent rate will apply to the next MUR500,000 of income, while the current 20-percent top tax rate will apply to the remainder. The changes will be effective from July 1, 2025.
The Budget announces a new Investment Tax Credit for Small Businesses. Qualifying small businesses or services providers with a turnover not exceeding MUR10m will be eligible for a three-year tax credit, amounting to five percent each year, on investments in equipment, except motor vehicles, up to MUR500,000 per year. The tax credit will be available for purchases from July 1, 2025, until June 30, 2025, and unused credits may be carried forward for up to five years.
However, the Budget announces that the four-year income tax holiday for newly formed companies, aimed at SMEs previously operating as a sole trader or partnership, will be withdrawn for SMEs providing professional services; tourism operators; and training institutions.
The new AMT will be introduced on companies operating in certain sectors. If the total tax payable by the company as computed under the Income Tax Act, after availing of all eligible deductions but before the deduction of tax credits, is less than 10 percent of its book profits, the company will be required to pay 10 percent of its book profits instead of normal tax. The book profits that will be used for the computation of AMT will be adjusted for capital gains or losses and dividends received from resident companies.
The AMT will apply to:
hotels;
insurance companies;
companies engaged in financial intermediation activities;
companies engaged in real estate activities; and
telecommunication companies.
Companies with a Global Business License will be specifically exempt, alongside companies exempt from income tax or companies that have been granted tax holidays.
Companies will not be allowed to offset any tax credits such as the foreign tax credit against the AMT payable.
The domestic minimum top-up tax, meanwhile, will ensure that the profits of multinational entities having a group annual consolidated revenue of EUR750m or more will be liable to a tax rate of at least 15 percent in Mauritius, with effect from July 1, 2025.
To further raise corporate taxes, the Budget announces that companies with chargeable income above MUR24m will be required to pay a "Fair Share Contribution" at the rate of:
five percent of chargeable income if they are subject to the standard tax rate of 15 percent;
five percent of chargeable income for banks including on income derived by banks from transactions with non-residents and Global Business Companies; or
two percent of chargeable income if they are subject to the reduced tax rate of three percent.
An exemption will apply to companies holding a Global Business Licence; companies exempt from payment of income tax or which have been granted tax holidays; and income exempted from income tax.
Corporates will not be allowed to offset any unused tax credits such as the foreign tax credit against the contribution payable. It will be payable on a quarterly basis under a system similar to the Advance Payment System under corporate tax.
The contribution will be introduced under the Value Added Tax Act.
Banks will also be required to make an additional contribution of 2.5 percent of their chargeable income from domestic operations, i.e., excluding income derived from transactions with non-residents and Global Business Companies. In addition, the Government has announced that it will remove the cap on tax payable under the Special Levy on Banks.
The Government has also said it will limit companies' access to several deductions to SMEs with annual turnover not exceeding MUR100m.
The Budget announces several other changes to the territory's tax regime, including a suite of tax breaks for property developers; various changes to value-added tax law; higher taxes on property purchases by non-residents; a new tax amnesty scheme, a new tax dispute settlement scheme, and the renewal of the Tax Arrears Settlement Scheme; and new foreign currency payment obligations for companies predominantly receiving foreign currency, among other things.